Norman Levine Illinois Tool Works ITW-N BUY May 30, 2007

Take profits? Has had a nice run, simply because the auto sector has done well. There is nothing wrong with the company. The growth should continue to go, because they are still looking at getting organic revenue growth. This is a chance to do some rebalancing. If this is overweight in your portfolio, then sell some. Depending on your waiting, he would sell half and then let the rest run.

A big industrial parts supplier. On their latest earnings, adjusted profits were up 16%, the highest quarterly income they’ve had in their history. Margins are 24%, an all-time record. The biggest rebound in the last quarter came from their welding and test and measurement. On the negative side, their auto business was flat. Trading close to an all-time high. This is a company with consistently growing free cash flow and dividends will follow. It is cyclical, so there will be volatility in down markets. He would wait for weakness to buy.

The best industrial company you never heard of. Shares are down 9% given their ties to the car industry. Even if there's a UAW strike, ITW will keep reporting steady-eddy earnings. They just boosted share buybacks to 7% of its market cap and raised their dividend by 7%. A very well-run company.